THE federal government has all but rejected a debt guarantee for Qantas after the airline announced a $252 million first half loss and plans to shed 5000 jobs.
Qantas, battling record fuel costs and fierce competition from subsidised rivals, is working to slash costs by $2 billion over three years.
The first-half loss, coupled with an $111 million profit for the same period a year earlier. sent Qantas shares down more than 7 per cent.
The cuts triggered a feisty debate in federal parliament, as Labor said it might support a debt guarantee but ruled out backing changes to legislation to allow the airline to lift its foreign ownership above 49 per cent.
Noting it was a difficult day for Qantas workers, Prime Minister Tony Abbott was cool on a debt guarantee, telling parliament the airline was not a special case.
“Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?’’ he said.
Virgin Australia boss John Borghetti said if the government gave Qantas a debt guarantee, he would seek a similar pledge “within 24 hours’’.
Mr Abbott strongly argued for enabling Qantas to secure more foreign capital and take the fight up to its competitors.
“We want to ensure that Qantas is not competing against its rivals with a ball and chain around its leg,’’ he said.
Opposition Leader Bill Shorten said there was no excuse for the government not to step in.
“This is the worst day for aviation people since the collapse of Ansett,’’ he said.
Opposition transport spokesman Anthony Albanese said changing the Qantas Sale Act was a distraction for government inaction. He said if foreign investment were an issue, the airline would already be at its 49 per cent foreign ownership limit and not the current 39 per cent.
Changing the act would have other ramifications, including thousands of jobs going offshore, rural and regional routes being dropped and the likely split of Qantas’ operations into separate domestic and international companies.
Independent senator Nick Xenophon has called for a judicial inquiry into the company’s financial mismanagement, particularly in relation to Jetstar, and called for Mr Joyce and the Qantas board to be sacked.
”The jobs that should have been lost are Alan Joyce and his board,’’ he said.
Mr Joyce said he was committed to Qantas and the board was 100 per cent behind the plan to turn the business around.
“We have a plan to cover every aspect of the business to get it back to profitability and we have the courage and commitment of the management team to make that happen,” he said.
STUDIO 3 NEWCASTLE AUSTRALIA 